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Labor Shortages In China? Stern Warnings About China’s Falling Fertility Rate – Real Time Economics – WSJ

Labor Shortages In China?  Stern Warnings About China’s Falling Fertility Rate – Real Time Economics – WSJ

Reminds me of the old economics adage – ‘demographics is destiny.’  The economic fears about China economically taking over the world are likely overblown.  China having a lower birth rate than France and the US.

Rob


China’s total population continues to grow, but the nation’s working-age population—those between the ages of 16 and 59—has dropped two years in a row, raising concerns about a shrinking labor force and economic growth prospects. The share of the elderly, or those who are more than 65 years old, was 9.7% in 2013, up from 9.4% in 2012, official data showed.

A labor shortage in the short run would be followed by diminishing demand, which in the long run will likely hurt China’s job market and decrease the number of jobs being created, said Mr. Huang, who received a PhD in biostatistics at John Hopkins University.

Such a message isn’t falling on entirely deaf ears: late last year, Beijing moved to ease its decades-long one-child policy byallowing couples to have two children if one spouse is an only child.

But the policy’s impact has been limited. By the end of May, only 271,600 couples had applied for permission to give birth to a second child, with 241,300 couples having been given the permit, Yang Wenzhuang, a director overseeing family planning at the National Health and Family Planning Commission, said at a briefing in July.

Economists and researchers say such small steps are far from enough.

“I’ve been traveling to different parts of the country in recent months to find out exactly what changes are taking place in our society…but wherever I go those who actually qualify [to have a second child] is less than 5%,” said Gu Baochang, a professor at Renmin University. The reason why that figure is so low is in part because many rural residents were already permitted to have a second child. Likewise, China’s rules previously allowed individuals who have no siblings to give birth to a second child, so long as they were married to someone who matched those same conditions.

Faced with a rapidly aging population and declining numbers of the working-age, government officials have strongly hinted that they may need to raise the retirement age.

via Baby Boom or Economy Bust: Stern Warnings About China’s Falling Fertility Rate – Real Time Economics – WSJ.

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